urge parliamentary scrutiny of the state within a state of the Khakis, especially the dreaded spy agency (DGFI). The interference of the Khakis into state politics will once again jeopardize institutionalization of elective democracy, good governance and secularism. The rogues fear social justice activists, critics, politicians and journalists too - Joy Manush!

Wednesday, November 21, 2012

Muhammad Yunus and Bangladesh government battle over Grameen Bank

The 8.3 million women who form the bulk of
the Nobel-winning microfinance bank's shareholders could be the losers

WHEN
TASLIMA Begum, a housewife turned entrepreneur from the north of Bangladesh, accepted the
Nobel peace prize in Oslo
in December 2006, it was a proud moment for Bangladeshi women. The Nobel
citation said the prize was awarded to Muhammad Yunus and Grameen Bank
"for their efforts to create economic and social development from
below".

Begum,
who had used her first 1,500 taka (£12) microloan to buy a goat in 1992 and
went on to become an elected director of Grameen's board, said: "My
parents gave me birth, but Grameen Bank gave me a life."

Six
years on from Oslo,
the 8.3 million women who make up the bulk of the microfinance bank's
shareholders are facing an unexpected challenge. The bank that received the
Nobel prize for its work in fostering socio-economic development from below is
fighting to stave off moves from its own government to enforce decisions from
above.

In
August, the government of Bangladesh
amended the 29-year-old law governing Grameen Bank, giving more power to the
government-appointed chairman to choose the bank's chief executive. The
government, a minority shareholder, also constituted a commission of inquiry,
the Grameen Bank Commission, which is expected to recommend further changes to
the governance structure of the
microlender.

Yunus
said there had been no failure in the running of Grameen to warrant an
investigation, and he questioned the need for a commission of inquiry.

"People
are copying Grameen's management system in other countries," he said.
"This is unique not only in Bangladesh but in the [rest of the]
developing world. Our staff members transport millions of taka in the villages
without armored cars or armed guards. Nobody steals our money. Surely we're
doing something right with our management model."

This
is the latest in a long-running tug of war between Yunus and the government,
which removed Yunus as the head of Grameen last year, saying he had passed
retirement age.

Mirza
Azizul Islam, a prominent economist and former economic adviser to the
government, said the trend was towards diluting the role of the board of
directors and concentrating power in the hands of government appointees.

"With
these unnecessary changes, the government is tinkering with a system that has
allowed Grameen to prosper while many state-run banks are embroiled in
scandals," said Islam. "If the basic structure of Grameen is changed,
the worry is that the poor women who are the rightful owners of the bank will
be disenfranchised."

Grameen
is governed by a 12-member board, nine members of which are elected from among
the borrowers while the other three, including the chairman, are nominated by
the government. The government owns 3% of the bank based on equity, while the
rest of the shares are held by the bank's members, mostly women.

"Grameen
Bank was formed as an institution owned by its borrower members, who are poor
women," said Yunus. "Through its unique decision-making process,
Grameen Bank has given millions of women the means to emerge from the shadows
in a male-dominated society and to make something of themselves."

Tahsina
Khatun, an elected director of Grameen, says the bank's independence is
non-negotiable. "Grameen is our bank," she said. "We bought
shares bit by bit with our savings. Now the government has started saying this
is a government bank. How can we accept that?"

Khatun
said Grameen, which gives small loans without collateral, runs on a system
based on trust. "If the trust is ruined, the bank will certainly be
affected."

At
the heart of the dispute are conflicting interpretations of the bank's
ordinance. A government review committee concluded last year that since Grameen
was created under a special law, it was a statutory public authority – in other
words, a government bank.

Yunus
contends that Grameen is an independent specialised bank which, according to
its founding charter, is run by its board of directors, not by the government.
Grameen's employees do not take their salaries from the government budget,
which means they are not public servants.

The
Awami League-led government's antipathy towards Yunus has been made clear by a
series of public comments made by government ministers. The prime minister,
Sheikh Hasina, has criticised microfinance institutions for "sucking blood
from the poor".

Mozammel
Haque, chairman of Grameen, denied the government was taking over the bank.
"The government will not take over the bank," he claimed. "The
bank's operations have been running smoothly according to the law." Haque
said the change in the ordinance was necessary to resolve a stalemate over the
appointment of a new managing director.

The
government has reacted to the stiff opposition put up by Grameen's directors by
asking a commission to look into the women's "qualifications" to
serve as directors. Critics have accused the government of harassment. Yunus
said: "I find it outrageous that people are calling into question the
qualifications of these women who have become owners of the bank with their own
money and through their hard work."